Electric car pioneer launches startup focused on EV-grid link

Updated: A pioneer of the electric car industry has launched a startup focused on managing the charging of groups of electric cars plugged into the power grid. Tom Gage, the former CEO of AC Propulsion — the quiet shop behind the Tesla Roadster drive train, the electric Mini and the eBox — left AC Propulsion late last year, and he told me in an exclusive interview on Monday that he incorporated his new company, EV Grid, in December.

Gage tells me that he formed EV Grid to work on so-called “vehicle to grid,” or V2G, technology, which involves using software and hardware to create a bi-directional flow from the power grid to the electric car battery. Utilities and power companies can use V2G to manage groups of electric cars plugged into their grids, and those aggregated vehicle charges can be used as on-demand energy storage, and for helping balance the grid load when needed.

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The power grid is in a constant state of flux, and utilities routinely have to manage supply and demand to keep the grid balanced. But since there isn’t much energy storage attached to the grid, utilities sometimes have to do this by taking measures such as firing up diesel generators on demand. But dozens of electric vehicles plugged into the grid, and managed properly, could provide these services. At the same time, utilities could pay the car owners involved in these projects, and the car owners could recoup some of the cost of electric cars, which are still pretty expensive.

Gage recruited two other former AC Propulsion execs for his new venture and established an office in Palo Alto and a shop close to AC Propulsion in San Dimas. Gage says he’s been working on V2G tech for years at AC Propulsion, but since AC Propulsion focuses on electric vehicle drive train technology, the company didn’t have the resources to work more closely on V2G.

EV Grid’s main partner right now is the University of Delaware and NRG Energy, which together created a joint venture called eV2g eVgo to build a pilot V2G project, which will be one of the largest of its kind in the U.S., and the world, when it’s completed. Gage says the project already has six or seven electric fleet vehicles using V2G in the program and by the end of the year hopes to build out that fleet to dozens, or even a hundred, cars.

University of Delaware professor Willett Kempton has been working on V2G technology for years and had already been working with Gage through AC Propulsion on the eV2g project. Gage and EV Grid will work on the vehicle side of the grid, installing hardware and software in the cars to enable management of the two-way flow. eV2Vg will develop the grid side commands, which will manage the vehicle charges.

It’s still very early days for V2G tech. According to a report from Pike Research, only about 100,000 electric cars will have V2G capability by 2017. Some of the biggest barriers to V2G are the lack of electric vehicles out there on the roads and the risk that electric cars using V2G will either lose their warranties or be damaged in some way. Another issue is the economics — how much will V2G-enabled grid services be worth to utilities, and by how much can they offset the cost of the cars?

Gage tells me his firm will be looking to answer these questions and others, and will more finely tune its V2G focus in the coming months. Gage says he’s waiting to work on a few deals before he raises money from outside investors.

Amazing concept, and touching on an aspect of electric vehicles that we don’t hear enough about.

From the consumer perspective, the big concern for EV charging is whether stations even exist where you need them. But the utilities side of the equation is much more complex — after all, we’re not talking about gas station technology here. We’re talking about potentially massive data management: When you plug your EV in at your friend’s house, who gets the bill for that fill-up? If you charge your car at home during off-peak hours, are you charged less? Could “filling” stations offer electricity from different sources at different rates?

Gage’s idea is fascinating — and would rely on the same intelligent technology that would address those questions. The bi-directional flow of power would have to be matched with a bi-directional flow of information — crediting a customer’s account for electricity storage services, and reliably and in real time matching storage needs with EV battery capacities.

As part of the smart grid movement, utilities are already inching away from their traditional customer information systems, and toward dynamic customer relationship and data management tools that can handle the kind of flexibility that an intelligent grid will require. It’s a significant revolution in how power provision works and what it will allow us to do.

Tom has been a leader in the EV space for many years. I’m very happy to see him in this new venture. V2G is clearly going to be a major industry in years to come, but some smart, ambitious people have to break the ground to get the seeds sprouted. With Tom at the helm, I see progress ahead.

I love to see the visionaries that move forward with innovative ideas, regardless of the associated start-up costs and fears. They are very often the future billion-dollar company CEOs in-the-making while others just sit back and scoff in their happy complacency. I’m excited to see where this goes in the future.